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How To Trade It: Alternate Energy Red Hot Into Presidents Speech

by Market Authority on February 12, 2013

in Commodities, Technical Analysis

The State of the Union address will commence at 9PM ET tonight. This speech by President Obama is said to focus on alternate energy (just like past speeches). Every time the president has made a major speech, solar, wind, battery, fuel cell stocks and even natural gas plays have run sharply higher. Most retail investors and traders try and jump on board the day before or the day after. However, they are late to the party of lose money 9 out of 10 times.

Some of the key stocks rocketing higher over the last few days are First Solar, Inc. (NASDAQ:FSLR) trading at $33.29, +0.93 (2.87%) and SunPower Corporation (NASDAQ:SPWR) trading at $9.70, +0.26 (2.75%). Additionally, natural gas engine plays are hot along with fuel cell battery and wind power. Capstone Turbine Corporation (NASDAQ:CPST) and Broadwind Energy Inc. (NASDAQ:BWEN) have both shot higher in the last week.

As stated before, the retail investor would be clamoring for an entry now, willing to pay current prices for these stocks in hopes the President would cause them to go higher still. History is against them. Every time these stocks run up drastically into a presidential speech, they roll over the following few weeks. The true way to play them would be to short them today and cover them in one week. If you are not a fan of shorting, stay on the side lines and wait for a pull back that is sure to come.

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